How Much Do I Need to Retire at 60 in Ireland?

Imagine reaching 60 and being financially free to enjoy life without work – what would it take to get there?

The dream of early retirement is growing stronger across Ireland. Recent research suggests that nearly 72% of people want to retire by 60 or sooner. Yet here’s the central question that keeps many awake at night: “How much do I need to retire at 60 in Ireland?”

Many aspire to early retirement in Ireland, but achieving it requires careful financial planning and substantial pension savings. The Central Bank warns that many people are not saving enough to provide for a comfortable retirement, underscoring the importance of planning for retirement well in advance.

Here’s the reality check. Retiring at 60 means you’re jumping ship six years before the state pension kicks in at 66. Those extra years? You’re funding them entirely on your own. It should also be noted that the current state pension wouldn’t sustain anywhere near most people’s pre-retirement standard of living.

This post will explore Ireland’s pension landscape – from state pension to private pension plans – and show you exactly how much you’ll need to retire comfortably at 60 across different income levels. We’ll cover understanding the Irish pension system, retirement plan options including PRSAs and occupational schemes, how to estimate your retirement income needs, and real-life examples with comparison tables for different earnings.

The path to retiring at 60 isn’t just about the numbers, though. It’s about creating a financial plan that gives you genuine freedom.

Understanding the Irish Pension Landscape

A successful plan to retire at 60 involves multiple streams of income. Think of it like building a three-legged stool – you need several solid supports to create stability.

The State Pension in Ireland

The State Pension (Contributory) forms the foundation of retirement income for most people. It’s a contributory pension, currently payable from the age of 66, to those who qualify for the State Pension by having made sufficient PRSI contributions.

The current full State Pension rate is approximately €289.30 per week in 2025, which is equivalent to about €15,000 per year. Whilst it’s a welcome contribution, even the full state pension alone might not be enough to live comfortably in retirement for most people.

Here’s where early retirement gets tricky. If you retire at 60, you won’t receive the state pension for roughly six years until reaching pension age. This creates an income gap that must be filled by personal savings or other forms of pension. Relying solely on the State Pension simply isn’t viable for retiring at 60.

Your planning must account for bridging this gap until 66 and then supplementing the state pension thereafter. It’s not impossible, but it does require more substantial preparation than a traditional retirement at state pension age.

Personal and Occupational Pensions (Private Pensions)

Occupational Pension Schemes

Many employers offer occupational pension schemes – essentially company pension schemes that can significantly boost your retirement savings. These come in two main flavours: Defined Benefit schemes (increasingly rare) and Defined Contribution schemes.

The beauty of occupational schemes lies in employer contributions. It’s essentially free money added to your pension pot. Some pension scheme rules even permit early retirement benefits from 50 onwards, though this varies by employer.

Occupational schemes offer the scope for significantly higher contribution limits compared with other schemes, which can be particularly valuable for high earners aiming to retire comfortably in Ireland.

Personal Pensions & PRSAs

If you’re self-employed or lack access to a workplace scheme, Personal Retirement Savings Accounts (PRSAs) and other personal pension plans become crucial. PRSAs offer flexibility – they’re portable and tax-efficient, moving with you between jobs.

The advantage of personal pension plans is accessibility. Most can be accessed from age 60, with some allowing early drawdown from 50 in specific circumstances. Starting a private pension plan early helps build a sufficient pension pot by 60, which becomes critical since you’re effectively retiring early relative to the state pension age.

Regulation and Security

Your contributions are generally secure and trustee-managed, with pension providers and financial advisors regulated by the Central Bank of Ireland. Recent pension legislation changes, including the introduction of auto-enrolment in 2025, are encouraging greater retirement saving across the population.

Always work with qualified financial institutions and consider consulting a Qualified Financial Advisor (QFA) for personalised pension advice. For high net worth individuals it would be advisable to work with a CERTIFIED FINANCIAL PLANNER™ as they would engage in far more meaningful financial planning advice.

Approved Retirement Funds (ARFs) and Retirement Options at 60

When you reach retirement, particularly early retirement, you face a crucial decision about how to draw your income.

ARF vs Annuity

An Approved Retirement Fund (ARF) keeps your pension invested whilst allowing you to withdraw income as needed. If you retire at 60 with a Defined Contribution or PRSA pot, you can typically take a tax-free lump sum and invest the remainder in an ARF.

ARFs offer flexibility but come with longevity risk – you must manage withdrawals and the underlying investment strategy carefully so your pension fund lasts throughout retirement. Given that your pension might need to last 30+ years if you retire at 60, this drawdown strategy becomes particularly important.

The alternative is converting your pension pot into an annuity – a guaranteed lifelong income. Annuities provide certainty, but rates aren’t currently the most attractive. Starting an annuity at 60 yields a smaller annual payout due to the longer expected payout period. Most early retirees prefer ARFs for their growth potential, though this requires more active management.

There is no one-size-fits-all all, so advice should be sought, taking your unique personal circumstances into consideration, as there are pros and cons with both options.

Tax Considerations

The tax relief on contributions represents a significant benefit of pensions. Contributions enjoy income tax relief up to 40% for higher-rate taxpayers, though there’s no relief from USC or PRSI on contributions. Tax relief limits increase with age – 35% of earnings in your late 50s, 40% at 60+ – encouraging higher contributions as you approach retirement.

At retirement, including age 60, you can typically take 25% of your pension as a tax-free lump sum (up to a lifetime maximum of €200,000). This lump sum often helps pay off any remaining mortgage or provides investment capital.

Withdrawals from an ARF are liable to income tax, PRSI & USC. It should be noted that after 66, there’s no PRSI liability. Annuities are also subject to income taxes in retirement.

Calculating How Much You Need to Retire at 60

Determining how much money you need to retire at 60 requires examining both your desired lifestyle and some straightforward mathematics.

Key Factors to Consider

Desired Retirement Lifestyle

The amount you’ll need depends entirely on the lifestyle you want to maintain. Recent research identifies three retirement standards in Ireland: modest (€19,200 annually), moderate (€27,600), and comfortable (€33,600) for a single person.

These figures reflect different standards of living – from covering basic needs to enjoying some luxuries. Higher earners might aim to maintain your standard of living close to working levels, whilst others might only need to cover the basic cost of living in retirement.

Consider how the cost of living affects your planning. Some expenses decrease in retirement – commuting, work clothes, lunches out. Others might increase – healthcare, leisure activities, and travel. Housing costs often drop if you’ve paid off your mortgage by 60, which should ideally be taken into account when building your financial plan.

Life Expectancy and Time Horizon

Retiring at 60 means funding potentially 25-30+ years of retirement. With life expectancy extending into the mid-80s and beyond, your retirement plan must ensure you don’t outlive your money. That’s a long time for your savings to support you.

Inflation and Investment Returns

Inflation erodes purchasing power over time, whilst investment returns (hopefully) help your pension pot grow. A common rule suggests a 4% annual withdrawal rate from your investments can help estimate the pension pot size needed for a given retirement income.

Other Considerations

Healthcare needs will likely increase with age. Having paid off your mortgage by 60 will reduce your required income significantly. Additional income sources – rental property, part-time work, other investments – all impact how much you need from your pension pot.

Financial stability requires more than just meeting basic expenses. You need emergency funds and flexibility for unexpected costs. Often, people don’t factor in one-off costs that will continue after you stop working. These could include house renovations, new cars, holidays, and gifts to children.

Estimating Your Retirement Income Needs

Replacement Rate Guidelines

The old rule of thumb suggested replacing about 50% of pre-retirement salary, but the Pensions Council notes this may be too simplistic for individual needs. Using the modest/moderate/comfortable targets provides more concrete guidance.

For example, someone earning around the average salary in Ireland (€50,000 annually) targeting a moderate lifestyle might need roughly €27,000 yearly in retirement – about 55% of their working salary.

Calculation Approach

Here’s a simple formula to calculate how much you need: estimate your required annual retirement income and multiply by 25 (assuming a 4% withdrawal rate). Want €40,000 retirement income? You’ll need roughly €1 million in your pension pot.

But here’s the crucial point for early retirees: from age 66, you’ll receive approximately €15,000 annually from the state pension. This reduces how much you need from personal savings – but you must still self-fund entirely from ages 60-65.

Using Retirement Calculators

A pension calculator can personalise these estimates. The Pensions Authority provides a free pension calculator online, allowing you to input your age, current savings, and target income to assess whether you’re on track.

These calculators factor in your current pension pot, expected growth, and ongoing contributions to show if you’ll reach your goal by 60. If there’s a shortfall, the calculator helps identify how much additional monthly saving is required.

Although these calculators can be a handy tool, we believe that running through a more nuanced and accurate forecast with a financial advisor is a better approach. They can account for taxes, investment returns, and the complexities of Irish pension legislation to create a more precise picture of how much you will need. This exercise is known as cash flow modelling and will allow you to make informed decisions about your overall plan.

Building Your Retirement Savings Plan

Start Planning Today

The sooner you start planning and saving, the easier it becomes to accumulate your target pension pot. Someone beginning at 30 versus 45 will see dramatically different outcomes due to compound growth.

Even if you’re 50 with limited savings, start planning today. Review your situation, maximise contributions (remember, you can contribute 35% of income with tax relief in your late 50s, rising to 40% at 60+), and let time work in your favour.

Contribution Strategy

The required monthly contribution depends on your timeline and target. Someone at 40 with no existing pension needing a substantial fund by 60 might need to contribute 20%+ of income to catch up. Always maximise employer matching and available tax relief.

Investment Allocation

For a 20-year horizon, growth-oriented investments are initially appropriate, shifting to more conservative allocations closer to retirement, with Investment Allocation strategies for reinvesting maturing investments adapting accordingly. This balance between growth and capital preservation becomes crucial for early retirees. 

Adjusting for Early Retirement

Targeting 60 rather than 66 requires a larger fund due to those extra years without state pension support. Saving as much as feasible during peak earning years (typically your 50s) becomes critical.

Consider semi-retirement as an option. Working part-time from 60 to 66 can significantly reduce the required savings while providing structure and additional income during those bridging years.

Regular Reviews

Monitor your progress regularly, ideally with the guidance of a financial advisor. Market changes and updates to pension legislation may necessitate plan adjustments. Creating a detailed financial plan and reviewing it annually helps ensure you can retire with confidence at 60.

Real-Life Examples: How Much You’d Need for Retirement at 60

Let’s examine concrete scenarios showing how much you will need to have saved by age 60 across different income levels.

Assumptions: Each person will receive the full state pension at 66; they want to retire completely at 60; planning for 30 years in retirement; assuming a 4% withdrawal rate; amounts in today’s value with no inflation adjustment for simplicity.

Comparison Table – Retirement at 60 Scenarios

Profile	Low Earner (Modest)	Mid Earner (Moderate)	High Earner (Comfortable)
Pre-retirement Salary	€30,000/year	€50,000/year (around average salary in Ireland)	€90,000/year
Target Retirement Income @60	~€20,000 (modest lifestyle, just above basic needs)	~€27,000 (moderate lifestyle, maintains standard living somewhat)	~€45,000 (comfortable lifestyle, half of final salary)
State Pension (from 66)	~€13,000/year (assumes full rate at 66)	~€13,000/year (full rate)	~€13,000/year (full rate)
Required Income from Personal Savings	Until 66: ~€20,000<br>After 66: ~€7,000	Until 66: ~€27,000<br>After 66: ~€14,000	Until 66: ~€45,000<br>After 66: ~€32,000
Total Pension Pot Needed by 60	€250,000 – €300,000	€500,000 – €600,000	€1,000,000+

Note: These pension pot estimates consider a 4% drawdown rate and funding early retirement years entirely from savings. For example, the mid-earner needs roughly €14,000 yearly from their fund once state pension begins, implying a pot of €350,000 for post-66 needs, plus approximately €162,000 to cover ages 60-65, totalling around €500,000+.

Low Earner Example (Modest Lifestyle)

Mary earns €30,000 yearly pre-retirement. She’s lived modestly, her home is nearly paid off, and she doesn’t expect lavish retirement spending. Retiring at 60, she aims for about €20,000 annual income – roughly what the state pension provides plus a small top-up.

Mary would need roughly €250,000-€300,000 saved. This allows her to draw €20,000 annually from 60-65 (using €120,000 of her pot), then from 66 onwards, the full State Pension (€13,000) covers most needs, requiring only €7,000 yearly from her remaining pension savings. This strategy should sustain her comfortably through her 80s.

Mid/Average Earner Example (Moderate Lifestyle)

John earns €50,000 (close to the average salary in Ireland). He wants to retire at 60 with a moderate lifestyle – annual holidays, car replacement when needed, pursuing hobbies. He calculates €27,000 yearly (slightly more than half his salary) would maintain a decent standard of living.

John needs the full €27,000 from savings between 60-65, then his personal drawdown drops to €14,000 yearly after state pension begins at 66. Using the 4% rule, €14,000 annually requires roughly €350,000 for long-term needs, plus about €162,000 for the first six years. John therefore targets €500,000-€600,000 in his pension fund by 60.

High Earner Example (Comfortable/Luxury Lifestyle)

Susan earns €90,000 as an executive. She’s accustomed to comfortable living – travel, dining out, quality experiences. She wants to retire comfortably in Ireland at 60, targeting €45,000 yearly income (half her salary, which should feel quite comfortable without work-related expenses).

Even with state pension (€13,000 at 66), Susan needs €32,000 annually from savings after 66. That alone requires roughly €800,000 (25 × €32,000). Additionally, ages 60-65 need €45,000 yearly entirely from savings (€270,000 total). Susan likely needs €1.0-1.1 million by age 60, possibly accumulated through an executive pension plan and additional investments.

With such a substantial fund, she can withdraw around 4% annually without depleting principal too quickly, achieving genuine financial freedom to retire early.

Tips to Achieve an Early Retirement at 60

Start Planning Today

Regardless of your age, start planning for retirement immediately. “The best time to start was yesterday, the second best is today” – especially if you need to retire early for health or personal reasons.

Even at 50 with limited savings, reviewing your situation and maximising contributions can make a significant difference. Remember, at 55-59 you can contribute 35% of income with tax relief, rising to 40% at 60+. Disciplined saving and growth can still get you on track.

Cut Costs & Boost Savings

Approach retirement debt-free if possible. Pay off your mortgage and any loans before 60. Redirect freed-up expenses – perhaps when children become independent or the mortgage ends – into extra pension contributions.

Saving as much as you can during your final working years significantly increases your pension pot. These years often coincide with peak earnings, so take advantage of that earning power.

Invest Wisely

Ensure your pension investments align with your timeline. In your 40s and early 50s, growth assets can help your fund grow despite some volatility. As you approach age 60, gradually reduce risk to protect accumulated wealth. Many funds offer lifestyle switching that automatically adjusts this balance.

Use Calculators & Get Advice

Regularly use pension calculators and seek professional financial advice for a tailored roadmap and to maximise tax reliefs with tools like bare trusts. Adjust contributions if there’s a shortfall. Consider seeking financial advice – a qualified financial advisor can create a detailed financial roadmap tailored to your situation, optimise your pension plan, and ensure you maximise all available tax reliefs.

Many advisors offer a free pension consultation or initial review. Professional input can make the difference between hoping for the best and having confidence in your plan.

Stay Informed and Flexible

Monitor policy changes. If pension legislation alters state pension age or introduces new auto-enrolment features, factor these into your planning. Be ready to adjust – perhaps you decide to retire at 55 instead, requiring even more savings, or market performance necessitates working slightly longer.

Flexibility might mean part-time work if the numbers don’t perfectly align at 60, but with proper planning, you can be able to retire on your terms.

Enjoying Retirement

The goal of all this planning and saving is to achieve financial freedom and a satisfying retirement lifestyle. With adequate savings, you can retire comfortably in Ireland and maintain your standard of living without financial stress.

Early retirement should reward decades of hard work – time for pursuing passions, travel, or relaxation, not scrimping and worrying. With sufficient preparation, retiring at 60 becomes truly enjoyable rather than merely financially viable.

Takeaway

Retiring at 60 in Ireland is absolutely achievable with diligent planning. Success requires considering all income streams – state pension, personal and workplace pensions, other savings – whilst planning for a retirement income covering your desired lifestyle needs and accounting for the gap from 60 to state pension age.

The sooner you start preparing, the more likely you are to accumulate how much you need to retire comfortably at 60. It’s never too late to improve your outlook – even small increases in saving can compound significantly over time.

Use the insights and examples in this guide to calculate how much you might need and start planning today. Consider speaking with a financial advisor to fine-tune your retirement plan. Early retirement at 60 can be more than a dream – with careful planning, it can be your reality.

Remember, we’re here to help guide you through this journey. You don’t need to figure this out alone – professional, independent advice can make all the difference in turning your early retirement aspirations into a concrete, achievable plan.